Two Calif. MedMal Insurers Lower Rates upon Department Request

Two California medical-malpractice insurers have agreed to lower their premiums, a decision the state-insurance commissioner says will lower costs to healthcare providers in the state by $4 million.

State-insurance commissioner Dave Jones used the occasion to renew his call for authority to stop health-insurance companies from raising premiums excessively.

Currently, Jones has the authority to reject excessive medical malpractice, life and property and casualty insurance rates through Proposition 103.

But, according to insurance department officials, he lacks the authority to regulate health-insurance rates, as was exhibited in the April 1 decision by Aetna to follow through on a decision to raise health premiums on small employers despite Jones’ finding that the rate hikes were excessive.

In announcing the decision of the medmal insurers to reduce rates, Jones again voiced support for A.B. 52, state legislation he is sponsoring that would give him authority to reject rate-hike requests he considers excessive.

“It defies reason that the insurance commissioner has the legal authority under Proposition 103 to reduce excessive medical-malpractice-insurance rates for doctors, dentists, and other medical providers, but I don’t have the authority to reject excessive health insurance or HMO rate increases for ordinary Californians, their families, or their businesses,” Jones said.

“We need to extend Proposition 103 to health insurance and HMOs so that we can reject excessive health insurance and HMO rate increases that are devastating Californians and California’s businesses,” he said.

The decisions by Medical Protection Company (MedPro) and NCMIC Insurance Company were announced by Jones, who said MedPro agreed to reduce rates 11.9 percent and NCMIC 7.25 percent.

MedPro is the fifth largest medical malpractice writer in California; NCMIC specializes in writing medical malpractice insurance for chiropractors.

The total premium savings from the companies’ decisions total nearly $4 million annually, Jones says. MedPro will implement its rate reduction on June 1 and NCMIC on July 1 of this year.

The two join three other insurers—NORCAL Mutual, The Dentists Insurance Company and The Medical Insurance Exchange of California’s physicians and surgeons program—that have lowered rates recently due to actions taken by Jones.

He said the total savings to medical providers in California will be nearly $23 million.

Last year, Jones required medmal insurers to submit rate filings to the Department of Insurance to justify their current rates. After a review of those filings, Jones called for the rate reductions.